LMC Automotive Global Light Vehicle Sales Update (December 2017)

2018/01/17

  • Global Light Vehicle sales fell by 1% year-on-year (YoY) in December. The selling rate was also slightly down; to 95.7 mn units/year, from 96.2 mn units/year in November. However, 2017 represented a record year once again, with 95.3 mn Light Vehicles sold worldwide.
  • The USA and Western Europe were key contributors to the drop in sales, but both were affected by fewer selling days than in December 2016. Meanwhile, sales in China and Japan were virtually flat, while the South Korean market slipped markedly. Although there were some more encouraging results in Eastern Europe and South America, these were not sufficient to push the global total into positive territory.



Commentary

North America

  • The US Light Vehicle market decreased 1.9% in 2017 over 2016, slightly ahead of the 1.5% drop in North America. Despite the decline, 17.2 mn vehicles were sold in 2017, the fourth largest annual volume in history. In December alone, 1.6 mn units were sold, a decrease of 5.2% from a year ago; the selling rate was 17.9 mn units/year. Incentives in December were 10.9% higher than a year ago.
  • The Canadian market added 88k units in 2017 to sell more than 2 mn units for the first time in history. Thanks to positive labour force dynamics, long loans, and recovering commodity prices, sales were up by 4.5%, to 2.04 mn units. Last month, 125k units were sold, down 0.8% from December 2016. In Mexico, December Light Vehicle sales plunged 17.6% YoY, to 158k units.

Europe

  • The West European Light Vehicle market fell by 5% YoY in December, with most markets facing two fewer selling days than for December 2016. For 2017 overall, the market expanded by 2.7% to 16.2 mn units, the fourth consecutive year of growth, and the best result since 2007. For 2018, West European market growth is forecast to slow once again. While there is limited scope for growth in Germany and ongoing headwinds expected for the UK, further recovery in the Italian and Spanish markets should support the West European Light Vehicle market’s growth towards 16.4 mn units.
  • Russian Light Vehicle sales surged to 166k in December, an increase of 14% YoY. For the year as a whole, Light Vehicle sales totalled just short of 1.6 mn units, up 11.9% from 2016, as the market recovered strongly from a disappointing January and February.

China

  • Preliminary data indicate that the December selling rate in China was 29.7 mn units/year, unchanged from a slightly upwardly-revised November. The temporary purchase tax on smaller vehicles expired at the end of 2017, but there was no spike in sales, probably because automakers and dealerships had already started to correct inventories (China’s sales data are wholesales data). YoY, sales declined marginally last month. Nonetheless, in 2017 as a whole, total Light Vehicle sales reached a record high of 28.6 mn units.
  • Sales growth in 2018 is expected to be modest, due not only to the higher purchase tax, but also to slower economic growth. While sales in major cities are constrained by the government’s measures to reduce air pollution, sales in Lower Tier cities are expected to remain the key driver of the market.

Other Asia

  • Mirroring the buoyant economy, the Japanese market ended 2017 on a strong note, with the December selling rate reaching 5.2 mn units/year. On a YoY basis, however, sales fell marginally in December, continuing to be impacted by the scandals at Nissan and Subaru. In 2017 as a whole, total Light Vehicle sales increased by 5.4%, the first expansion since 2014.
  • In South Korea, sales unexpectedly fell sharply in December, due to supply disruptions caused by the labour strikes at Hyundai. The December selling rate was 1.5 mn units/year, down nearly 17% from a strong November. Total Light Vehicle sales fell by almost 2% in 2017 (the second consecutive year of decline), dragged down by the pull-ahead effect of the temporary tax cut in 2015-2016.

South America

  • After several months of strong sales, the Brazilian market slowed abruptly, with the December selling rate falling to 1.94 mn units, down nearly 14% from a strong November. It is possible that both dealerships and consumers are waiting to see whether the government’s yet-to-be-announced new automotive policy brings incentives. Nonetheless, total Light Vehicle sales increased by nearly 10% in 2017 as a whole.
  • The Argentine market ended 2017 on a robust note. The December selling rate of 944k units was down 5% from November, but that was still a four-year high. In 2017 as a whole, total Light Vehicle sales increased by 26%, aided by sharp falls in inflation, the brightening economic outlook and rising business and consumer confidence. In addition, the recent tax cuts on vehicles have brightened the sales outlook for this year.

 

Sales (units) Selling rate (Units/year)
December
2017
December
2016
Percent Change Year to date
2017
Year to date
2016
Percent Change December
2017
Year to date
2017
Year
2016
Percent Change
WORLD
8,757,974
8,846,570
-1.0%
95,307,942
93,037,545
2.4%
95,665,813
95,307,942
93,037,545
2.4%
USA
1,601,853
1,689,053
-5.2%
17,210,139
17,540,327
-1.9%
17,871,915
17,210,139
17,540,327
-1.9%
CANADA
124,708
125,725
-0.8%
2,035,362
1,947,926
4.5%
1,881,744
2,035,362
1,947,926
4.5%
WESTERN EUROPE
1,188,558
1,250,673
-5.0%
16,200,772
15,772,015
2.7%
16,226,333
16,200,772
15,772,015
2.7%
EASTERN EUROPE
451,506
428,943
5.3%
4,217,181
3,891,943
8.4%
4,496,437
4,217,181
3,891,943
8.4%
JAPAN
390,311
391,386
-0.3%
5,166,737
4,903,736
5.4%
5,244,934
5,166,737
4,903,736
5.4%
KOREA
150,434
182,232
-17.4%
1,752,205
1,783,990
-1.8%
1,526,119
1,752,205
1,783,990
-1.8%
CHINA
3,045,696
3,048,362
-0.1%
28,591,887
28,021,578
2.0%
29,681,037
28,591,887
28,021,578
2.0%
BRAZIL / ARGENTINA
249,997
237,572
5.2%
3,044,575
2,672,018
13.9%
2,887,948
3,044,575
2,672,018
13.9%
OTHER
1,554,911
1,492,624
4.2%
17,089,083
16,504,012
3.5%
15,849,347
17,089,083
16,504,012
3.5%
Notes: The percentage change in the final column compares the average selling rate in the year-to-date with the last full year.
Late reporting countries and estimates are included in "Other".
Eastern Europe includes Turkey.
China includes estimate of light vehicle imports.

For further information or inquiries for forecast data, please refer to LMC Automotive's products.